Custom Clearance Process in Nigeria – 8 Critical Steps Out

Custom Clearance Process in Nigeria

Custom clearance process in Nigeria is a two-way clearance procedures for every international export or import of goods. First is the origin custom clearance procedure pursued at the country of supply of goods. In the same way, there is the import custom clearance at the destination country.

In this article, I will focus exclusively on import custom clearance procedure in Nigeria. I will reveal all the steps importers need to take to initiate and finish custom clearance process in Nigeria.

consequently, this article will help reveal to importers how to best reduce cost while going through the custom clearance process in Nigeria with their clearing and forwarding agents.

Additionally, you can contact me on 2348061904041 for more information.

Meaning of custom clearance Procedure

custom clearance procedure is the process of declaration of goods and their values to the Custom Authority. The purpose of these declaration processes are for registration, levy or duty payments, security, research, etc. Custom Clearance process in Nigeria usually involves preparation and submission of required documents to the Custom Authority. The Authority carries out physical examinations of such goods before giving a clean/clear report.

Clearance Procedure can be grouped into two, which are;

• Import Custom Clearance Process/Procedure
• Export Custom Clearance Process/Procedure

I will focus on import clearance process in Nigeria trading space in this article. We shall look at Custom Clearance in another article.

Custom Clearance Process in Nigeria

Step 1: Decide on Tax Identification Number – TIN

You can choose to import goods in your company’s name or in the name of another company. It is a common practice by most importers to use their clearance agency’s company. Take this step if you hope to ship the goods in your company’s name. Otherwise, you may skip this entire step 1.

• Register your company with the Cooperate Affairs Commission (CAC) of Nigeria. The company may be a business enterprise (business name) or Limited Liability Company, or any cooperate structure acceptable by law. Note that an individual tax payer can also import as an individual.
• Obtain your TIN from the Federal Inland Revenue Service (FIRS) office nearest to your registered office address with your CAC documents. You will need to ensure you have made a company seal or stamp as it is commonly known.
• Log into your Trade Window website with your TIN as your username. Appreciate the interface and see what you can do with your company. G-Line Logistics, together with our freighting partners and forwarders, can process all your needs.

Step 2: Pre Importation Documents – Form M

All standard importation methods in Nigeria require Form, the first and most important of all. The documents you require to open Form M are;

• Proforma invoice,
• Marine Insurance Certificate (MIC),
• SON product Certificate (SONCP),
• SON Import Permit and,
• NESREA Import Permit (for used items)

It will help to have a glimpse of what each of this documents are for your benefits and consumption.

Proforma Invoice

This is the invoice the seller or your supplier gives to you. It is an invoice containing estimated quote of all the items of import. the proforma invoice serves only for custom purposes. It does not represent the actual invoice and cannot be a demand or request for payment. Commercial Invoice may be discussed in some other episodes.

Note that not all proforma invoices are accepted by custom. An acceptable proforma invoice must contain the following;

• Items description
• Unit prices of items
• Total amount of items
• Country of Origin of goods
• Similar, country of supply of shipment or cargo
• Means of transportation (air, road, or sea)
• Estimated freight cost
• Seller or shipper’s (or consignor’s) address and contact details
• Buyer or consignee’s address and contact details.

Marine or Cargo Insurance:

There are a number of insurance companies in Nigeria. Some of the most popular ones includes

• AIICO Insurance PLC,
• NEM Insurance,
• Zenith Insurance, etc.

You can simply contact one and request for Marin Cargo Insurance.  G-Line Logistics can help you with which insurance can serve you best.

SON Product Certificate

SON PC is the the Standard Organization of Nigeria confirmation that a product conforms to standards and technical regulations. It is Valid for 6 months to 1 year, depending on the type you obtained ultimately.  Alternatively, you can obtain SON import permit from regular importers for a duration of 6 months to 1 Year as well.

PC is from the country of origin, whereas, import permit is from Nigeria. Also, an importer can freely initiate the importation of any item with just the PC. Whereas, regular importers must have their SON Import Permit from. The permit requires these importers to state all the goods or item they want permit, for whole period of 6 months to 1 year, at the application stage.

SON Agencies

There are five agencies that process SON certifications at the Supplier/seller origin country. Most used in Nigeria are;

1. INTERTEK
2. COTECNA
3. CICC
4. SGS

You may approach any of these companies to obtain your SON product certification for the product you hope to import into Nigeria. You may employ the expertise of G-Line to process your SON on your behalf. Watch out for more details on how to process SON certificates and regulatory certificates need for import and export.

Form M

Keep your bank in the know for when you want to use Form M. You will usually be charged about NGN8,000.00 each time you request for Form M. Some Banks takes up the burden to process Form M on your behalf.

Nigeria Singe Window For Trade

You may now use the bank form M to request for Form M via the Nigerian Single Windows for Trade. This can be done buy using the details created in stage 1 above.

Step 3: Cargo Shipping

When you obtain your form M, you are set to ship your goods. Below are the processes to follow;

• Give form M to your supplier or shipper.
• the shipping company issues shipping documents. This could be an air waybill, bill of laden, sea waybill, or telex releases, depending on the shipping method employed.

Step 4 Post Importation Documents

SONCAP

• The cargo shipping starts. Before loading, cargo are inspected by chosen SON agency.
• Seller obtain SON Conformity Assessment Program Certificate – SONCAP from SON agency. This is for when you used SON PC in obtaining your Form M. Else, if SON Import Permit is used in the Form M stage, then this is not necessary. This is because SON Import Permit covers for Form M and Pre Arrival Assessment Report. The Difference between the SON PC and the SONCAP is that the PC confirms the product conformation to SON standards. SONCAP confirms the products in a specific shipment conforms with the Nigerian technical regulations and approved international, regional, or national standards
• Seller provides the actual invoice (shipping/commercial invoice). In addition, the packing list, Combined Certificate of Value and Origin (CCVO), with form M number on all documents.
• activates your SONCAP or SOON Import Permit against the above documents, with SON direct. This will make it possible for SON to verify what you received from your agent.

PAAR

• Pre Arrival Assessment Report is obtained by your bank from the Nigerian Customs when you give them the activated documents. obtain the PAAR from your bank.
• Finally, handover your PAAR and other documents to your clearing agent.

Step 5: Custom Clearing Process – Custom Duty

This is the official and compulsory amount payable to the Nigeria government for importing into the country.

• Assessment Notice (Debit Note) is either by DTI Cafe or the clearing agency cafe. It shows clearly total amount of duty payable to Nigerian government through its agency – the customs services. This is calculated using international standard. An article will be published to show how to calculate this from the comfort of your bedroom.
• Consignee or clearing vendor makes payment at customs approved bank using customs assessment notice.

Step 6: Examination and Booking

• The clearing agent will now proceed to secure stamps release from different Units of the Nigerian Customs like
  • Enforcement Unit,
  • customs intelligence unit, and
  • customs gate control
• Signing of examination form by Government agencies in the port is then carried out. Such agencies are;
  • NDLEA,
  • Anti-Bomb,
  • Police,
  • SSS,
  • NAFDAC,
  • Others.

Step 7: Issuance/Payment of Debit Notes

• The clearance vendor obtains shipping charges from the Liner Agent, aka shipping company that conveyed your cargo from origin country. He presents the Bill of Lading to the Liner Agent, who now issues an invoice or debit note. Most popular of these companies are
  • Maersk
  • CMACG (French Base)
  • COS CO (from China)
  • The Swiss Mediterranean Shipping Company (MSC)
  • Grimaldi Agency
  • APMDC, etc.
• Clearing agent gets an invoice for terminal charges at the terminal operator’s office. The primary role of the terminal operator office is to secure the  container and to  provide the handling equipment required to carry or convey containers for examinations by the Nigerian Customs, or scanning processes in or around the Seaport.
• Go to the approved bank to pay both terminal and shipping company’s charges. Some terminal requires shipping company’s charges to have been paid before examination.
• The shipping companies then issues Delivery Order to the consignee and transmits the container to the terminal after receiving payments. This is where all the documents needed by the terminal operator to issue Exit Note, Terminal Delivery Order (Shipping Company DO), and every other supporting documents, in addition to other customs release documents. Terminal Delivery Order (TDO) is then issued by the terminal operator. Cargo is then released for truck out at the Final Gate.

Step 8: Final Clearing Step

The truck then proceeds to final gate and waits for other Customs documentations such as confirmation of duty , endorsement and multiple registration of documents. This is where you have it; truck carries your highly regimented container from the prison of the Seaport to your final destination; your warehouse or designated point.

Point of Notes

1. Most band may require your supplier to forward stage 3 documents directly to them. Some banks may be more lenient and allow you provide the document, by and or scanned.
2. Using this recommended process will help you reduce known bottleneck with the Nigerian Customs.
3. This process applies to both air and sea freight with slight difference.
4. Goods marked as used are with NESREA certificate and not SON PC or SONCAP

Conclusion

Gods imported from one country to another will undergo two custom clearance procedures. First at the supplier country of origin, then at the buyer/consignee country. This article has discussed details of the import clearance procedure at the buyers end.

Watch out for our Next Article on Cost of Clearance in Nigeria.

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